Chop shops are illegal automobile garages that buy stolen cars, disassemble them, and sell the individual parts for a profit. Chop shops often disassemble a car within hours of purchasing it from the thief who stole it—making it difficult for the police and the rightful owner to find the stolen vehicle. Chop shops are often operated in residential garages and small commercial spaces to avoid detection, but are usually part of a large criminal network or organization.

It is a crime under federal law (18 U.S.C. § 2322) to knowingly own, operate, maintain, or control a chop shop. There are significant fines and penalties under federal law for operating a chop shop—up to 15 years imprisonment for a first conviction, with the maximum fine and imprisonment doubled for any subsequent conviction.

States also have criminal laws (located in the penal or criminal code or statutes) that prohibit the operation of a chop shop. An offender may be prosecuted under state chop shop laws in addition to a federal prosecution, or instead of a federal prosecution.

In Iowa, operating a chop shop is illegal and is addressed under Iowa Code Section 714.8A, which defines and penalizes the crime of 'Motor Vehicle Theft.' This section makes it unlawful for any person to knowingly possess, buy, sell, disassemble, or alter a stolen motor vehicle or motor vehicle parts. The penalties for operating a chop shop in Iowa can include imprisonment, fines, or both, and the severity of the punishment depends on the value of the stolen vehicle or parts and the offender's criminal history. Additionally, under federal law (18 U.S.C. § 2322), it is a crime to knowingly own, operate, maintain, or control a chop shop, with penalties including up to 15 years imprisonment for a first conviction and potential doubling of fines and imprisonment for subsequent convictions. Offenders in Iowa may face prosecution under both state and federal laws for chop shop-related activities.